2025 Closes Strong on Record Highs as the New Year Kicks Off

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Main Content:

1.    Major indices’  performance 2025

2.    U.S stocks yearly wrap 

3.    S&P 500 sector index  performance 2025

4.    China/Hong Kong stocks yearly wrap 

5.    Singapore stocks yearly wrap 

6.    Major indices weekly chart and technical support & resistance levels

U.S.

For the week of Jan 2, U.S. equities retreated modestly during the holiday-shortened week amid light trading volumes, though major indexes closed out 2025 with double-digit gains for the third consecutive year. The Nasdaq Composite (COMP) underperformed for the week, followed by the Russell 2000 (RUT) and S&P 500 (SPX), while the Dow Jones Industrial Average (DJI) proved relatively more resilient.

The scale of outperformance in U.S. mega-cap technology stocks throughout this bull market has been striking. Over the past three years, the Magnificent Seven have surged 325%, far outpacing the approximately 80% gain in the S&P 500, 40% in the Russell 2000, 50% in the Euro Stoxx, and 95% in Japan’s Nikkei.

Refer to the major indexes’ 2025 performance table below. The Hang Seng Index (HSI) was the top performer with a 28% gain, followed by the Straits Times Index (STI) at 23%, Nasdaq Composite (20%), Shanghai Composite (18%), S&P 500 (16%), Dow Jones Industrial Average (13%), and FBM KLCI (2%).

Note: price return, excluding dividends

Key highlights for the week and next:

1.    U.S. economic resilience remains intact. Recent data continue to point to a firm economic backdrop heading into 2026. While shutdown-related distortions clouded late-2025 releases, consumer activity remains healthy, reinforcing expectations for continued expansion rather than a sharp slowdown. 

2.    Inflation trends remain supportive but require confirmation. With prior CPI readings affected by data collection issues, upcoming inflation and labor reports will be closely watched for a cleaner read. Consensus expectations point to inflation holding near 3% before easing later in 2026. 

3.    Labor market shows cooling, not stress. Jobless claims declined for a third consecutive week to 199k, among the lowest readings of the year, while continuing claims also edged lower—suggesting a labor market that is gradually normalizing rather than deteriorating. 

4.    Fed outlook remains finely balanced. December FOMC minutes highlighted divisions among policymakers, with most officials open to further easing if inflation cools as expected, while others prefer patience. Markets continue to price limited rate cuts in 2026 rather than aggressive easing. 

5.    Housing activity shows early signs of stabilization. Pending home sales rose 3.3% in November, the largest increase since early 2023, supported by lower mortgage rates and wage growth outpacing home price appreciation. 

6.    Diversification themes gain importance into 2026. With mega-cap technology leadership showing signs of broadening, earnings growth is expected to become more evenly distributed across sectors, mid-caps, and international markets—reinforcing the case for diversified portfolios.

 

SPX sectors in play

Within the S&P 500, Energy was among the few sectors to post gains, supported by higher oil prices amid elevated geopolitical tensions. Looking into 2026, cyclicals, value-style investments, mid-caps, and international equities continue to trade near historical average valuations and may benefit from improving liquidity conditions. Refer to the SPX sector ETF performance table for 2025 below.

Note: price return, excluding dividends

Indices technical levels

All three major U.S. indexes appear to be consolidating sideways while maintaining their primary uptrends. Click below three indices for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China / Hong Kong

Mainland China equity markets ended the holiday-shortened week mixed. The Shanghai Composite Index (SSE) edged higher, while the blue-chip CSI 300 declined slightly. In Hong Kong, the Hang Seng Index (HSI) rose 2.01%, led by technology and AI-related stocks.

Key highlights for the week and outlook for China/HK:

Official data released Wednesday showed China’s manufacturing PMI rose to 50.1 in December, up from 49.2 in November, ending an eight-month contraction streak. The improvement supports the view that Beijing is likely to adopt a measured approach to stimulus in 2026, though some analysts continue to argue for more aggressive measures to revive domestic consumption.

Refer to below Hang Seng Index constituents’ performance table for 2025.

Click below for SSE and .HSI weekly chart.

SSE weekly chart

.HSI weekly chart

 

Singapore

The Straits Times Index (STI) delivered a strong performance in 2025, closing up 22.67% (price return, excluding dividends)—its second consecutive year of double-digit gains, following a 16.89% return in 2024. Analysts remain constructive on the STI heading into 2026, supported by stable fundamentals, attractive yields, and improving regional sentiment.

Refer to below STI index stocks’ performance for 2025.

Click below for STI weekly chart.

STI weekly chart

Source: Some contents and data excerpted from various public market reports. Please comment to claim copyright ownership of any material, and I will remove it if necessary.